Employment Support

Part of the debate – in the Scottish Parliament at on 17 September 2020.

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Photo of Murdo Fraser Murdo Fraser Conservative

The debate has been short, and there has been some consensus and there have been some points of disagreement. I will start with the points of consensus.

There has been broad recognition by members across chamber of the value and importance of the coronavirus job retention scheme. More than 900,000 jobs have been supported and of those, more than 50 per cent of people had returned to work by August. Even the SNP’s paper that was published, I think, yesterday, about the SNP’s plans to extend the scheme, says that

The UK scheme compares favourably to wage subsidy schemes in other countries.”

The SNP credits the scheme with keeping unemployment in Scotland at a rate that is 3 per cent to 4 per cent lower than it otherwise would have been. I welcome that, as well as the minister’s comments acknowledging that it is one of the most generous schemes in the world, and that it has made a huge difference to supporting the Scottish economy.

Of course, that is not the only thing that the UK Government has done to support jobs in Scotland. The job retention bonus, which was mentioned by Maurice Golden, provides £1,000 for every employee who has been kept on, and the £2 billion in the kickstart scheme creates hundreds of thousands of high-quality work placements. There has been expansion in work-search support for people who are searching for work, a cut in VAT for hospitality and the eat out to help out scheme. And so the list goes on.

However, we are here to talk specifically about the job retention scheme. I recognise the concern of many members about what will happen when that scheme comes to an end at the end of October. I have also heard that concern from businesses that are worried about the prospect of a cliff edge. While a lot of people have gone back to work, some sectors of the economy are struggling because they are still restricted.

Earlier I had an exchange with the cabinet secretary about the wedding industry. It is desperate to get back to work but is, because of the current restrictions, very much constrained in doing so. Therefore, many of its employees are furloughed.

What will we do next? This afternoon the SNP has called for an extension to the furlough scheme. It is, of course, the easiest thing in the world for the SNP Government to call for something to be done by somebody else when it will not have to pay for it, and that somebody else will.

As Alex Rowley pointed out in his winding-up speech, we have to look at what the Scottish Government can do to assist. Remember that the Scottish Government has been given a guarantee of an additional £6.5 billion in the current financial year. Johann Lamont made a very good point when she asked whether all that money has been wisely spent. Has it all been spent? Where has it gone? We still do not know how much of it has been spent or where it has all gone. We could do with answers to those questions.

In the context of money, let us not forget that the SNP Government has, since 2007, benefited from fiscal transfers from the rest of the UK totalling over £62 billion. I repeat: £62 billion has come from the rest of the UK to support spending in Scotland.

It would not be a debate in this chamber without the usual tiresome mentions of independence by SNP members. We even had them from the minister. “If only we were independent, we could extend the furlough scheme indefinitely—forever.” There was no word about how it would be paid for. There would not be enough in the way of unicorns and fairy dust in an independent Scotland to pay for the furlough scheme that we have had, never mind an extension to it. The SNP Government simply could not have afforded it.

I accept the point that a number of members made, that there are issues for business as we get towards the end of October. We need to look at what can be done to fill the gap. There is an argument for considering extension to the furlough scheme, and there might be an argument for looking at extensions in particular sectors of the economy that have been hardest hit. However, there is no conclusive argument, which is why we do not support the Government’s motion. We are not persuaded that that is the only answer at this point.

I say that because the economy is changing, and we have to recognise that. Some jobs that existed before Covid might not have a long-term future, because of economic changes. For example, we know that, as a result of Covid, many people will work from home instead of commuting to a workplace. That will have an impact on the supply and servicing of office space. It will have an impact on transport services, including the number of people who use public transport. We heard about the impact on aviation in yesterday’s debate. I suspect that it will be a long time before people are flying in the numbers in which they were flying last year. A furlough scheme extension of eight months will not be a lot of help in the long term to people in that sector.

Rachael Hamilton made a really important point. We need to be supporting the people who are in jobs that might not have a long-term future because of economic change, and we need to use resources for retraining and support, instead of for extending the furlough scheme for those people for a longer period. We should be looking at that sort of solution.

Something should replace the furlough scheme—that is what we say. It might be a targeted extension, or it might be a direct job subsidy. It might be more cuts to employers’ national insurance contributions, or it might be something else. I know that the chancellor, Rishi Sunak, will be looking at all those possibilities. This Parliament should not be tying his hands to one particular solution when there is a wide range of alternatives that he is looking at to ensure that we address the legitimate concerns of the business community about what is going to happen after the furlough scheme ends—[

Interruption

.]

I hear members shouting. I would have been happy to take an intervention, but I am in my final minute.

I will say this in closing. We should recognise the benefits of the furlough scheme; it has been massively to the advantage of workers and business in Scotland. We should also agree that we need more action to be taken by the UK Government after the end of October. However, we should consider all the options and not tie ourselves to one particular outcome, as the motion would do.

Above all, we need to ask the Scottish Government to look to its own resources, which is all the extra money that it has been given to support business in Scotland better than it has been doing. That is the point that we make in our amendment, which I am pleased to support.